British shoe retailer Dr. Martens Plc has significantly increased its turnover in the financial year 2022/23. However, higher costs and problems at the company’s logistics center in Los Angeles meant that profits fell short of the previous year’s level. This emerges from preliminary figures published by the company on Thursday.
According to this, sales in the financial year ended March reached a level of around 1.00 billion British pounds (1.16 billion euros), which means an increase of ten percent compared to the previous year. Adjusted for changes in exchange rates, revenues increased by four percent.
Not least thanks to numerous new openings, sales in the company’s own stores grew by 30 percent (currency-adjusted +25 percent) to 241.7 million pounds sterling. In e-commerce it rose by six percent (currency-adjusted +1 percent) to 279.0 million British pounds, in the wholesale business by four percent (currency-adjusted -3 percent) to 479.6 million British pounds.
CEO Wilson complains about “operational errors” in America
While the company posted strong gains in Europe and Japan, results in America fell short of expectations. The reasons for this were not least the generally weak consumer mood and delivery bottlenecks that resulted from serious problems in the new logistics center in Los Angeles.
Management made “operational mistakes” in America, CEO Kenny Wilson admitted in a statement. These happened “when we moved to our distribution center in LA and when we implemented our marketing campaigns and in the online business”. In the meantime, the company has made “detailed investigations” into the problems and has begun to implement “the lessons learned”. Among other things, the local team was “considerably strengthened”. The return to strong gains in America has been Martens “top operational priority,” Wilson stressed.
Higher product costs and one-off charges resulting from the problems in Los Angeles, among other things, meant that profits were lower than in the previous year. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by seven percent to 245.0 million pounds sterling. Net profit even shrank by 29 percent to 128.9 million British pounds (149.8 million euros).